Crude Oil Prices Rise to $95 per Barrel and Beyond: Impact on Markets and Consumers in 2023

On Monday, the price of crude oil rose to a barrel costing $95 and beyond. Brent crude increased by 0.38% to settle at $94.30 a barrel as of 11.14 WAT, while US West Texas Intermediate crude increased by 0.29% to settle at $90.28 a barrel.

The increase seen in oil prices on Monday was said to have been driven by predictions of a widening supply in Q4 following the extended cuts of oil from Russia and Saudi Arabia until the end of the year.

On September 5, Russia and Saudi Arabia announced that they would be extending voluntary oil cuts to the end of this year. These two countries are known to be among the biggest oil-producing nations in the world. However, the oil cuts between these countries vary.

Saudi Arabia said it will extend its voluntary oil output cut of 1 million barrels per day (bpd) for another three months until the end of December 2023, while Russia extended its voluntary decision to reduce its oil output cut by 300,000 barrels per day (bpd) to the end of this year.

It started in April when Saudi Arabia and some members of OPEC and its allies, called OPEC+, announced voluntary cuts of 1.66 million bpd. In June of the same year, at the OPEC meeting, Saudi Arabia announced another voluntary cut of 1 million bpd starting in July 2023.

That did not stop, as Saudi Arabia in July made another voluntary cut of one million bpd until August. 

Speaking about the oil production cut, Jide Pratt, an energy expert, talked about how this would lead to an increase in the commodity. 

He said to TheCable,

• Due to the reduction of the production quota from Saudi Arabia, which will stay until year-end, there will be more pressure on pricing.

• I won’t be surprised if we see almost $100 crude as we approach December.

• Sadly, our local production is not as high as it should be to take advantage of high crude. August production rose marginally but is still far from our production quota.

Nigeria's oil production increased to 1.18 million barrels per day (bpd) in August, which was a significant shift from 1.08 million barrels per day (bpd) in July.

Also, the special adviser to President Bola Tinubu, Ajuri Ngelale, said that Mr. President said that Nigerians wouldn't experience an increase in the petrol pump price.

The Nigerian National Petroleum Company (NNPC) Limited also commented on this, as the cooperation said that there are no plans to increase pump prices despite the rise in crude oil prices, landing costs, and fall in the value of the naira.